The Lansing State Journal reports that federal taxpayers will provide Michigan State University with a $950,000 grant to help produce a new economic development ‘toolbox’ for the 21st century. The spending is questionable, because as the Mackinac Center and others have documented, there is in fact nothing new under the economic development sun. Reviews by economists generally show that development programs typically fail to work as advertised.

Nothing useful will be accomplished if this spending just devises new labels for programs that empower government bureaucrats and political appointees to dole out speculative handouts, favors and discriminatory tax breaks to particular interests. The new spending will actually be harmful if it pays for MSU to be a de facto cheerleader for failed corporate welfare schemes — an unsavory role the university has played in the past.

Alternatively, MSU could provide a valuable service if it used this grant to undertake a systematic, rigorous, dispassionate and comprehensive review of the real world record of “incentive” programs, compared to the promises made by their political masters when the schemes are concocted and the favors are delivered.

Those promises are often buttressed by intricate computer model forecasts created by applying questionable assumptions to various sets of statistics. Later, studies performed by the government or some hired consultant almost invariably use laughably biased and inadequate methodology to show positive benefits.

If state economic development programs must exist at all, their success or failure must be reviewed in a way that provides policymakers and others with the credible, reliable information. Developing a dispassionate framework for program reviews and publicizing the results might help citizens come to grips with just how wasteful these programs are.

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